The Sale of Manufactured & Mobile Homes By Real Estate Brokers

A Department of Building and Fire Safety license is generally required to sell manufactured/mobile homes.
Generally, a license issued by the Office of Administration of the Arizona Department of Fire Building and Life Safety (“DFBLS”) is required to act as a broker or salesperson in the sale of manufactured homes, mobile homes and factory-built buildings (also known as modular) and subassemblies. Pursuant to A.R.S. §41-2194(3-4), it is unlawful to “engage in the business of a salesperson of manufactured homes, mobile homes or factory-built buildings . . .” or engage in the business of contracting to sell any new or used manufactured home, mobile home, factory-built building or subassembly (hereinafter collectively referred to as “manufactured/mobile home”) without a license issued by the DFBLS.

There is a limited exemption from the DFBLS licensing requirements for real estate licensees
There is a limited exemption for real estate licensees in the DFBLS licensing requirements. Pursuant to A.R.S. §41-2178(B) (1), the requirements of licensure from the DFBLS do not apply to:

Real estate brokers and real estate salesmen licensed under section 32-2122 . . . with respect to used manufactured homes, mobile homes, factory-built buildings or subassemblies, if the manufactured home, mobile home, factory-built building or subassembly is listed in a contract for transfer of an interest in real property executed by its owner and is installed on the real property.

FAQ’s on qualifying for the DFBLS licensing exemption(1) What are the statutory requirements of the DFBLS licensing exemption?

The manufactured/mobile home must be “used”

The manufactured/mobile home must be “installed” on the property

The manufactured/mobile home must be “listed” in a contract for transfer of an interest in real property executed by its owner

(2) When is a manufactured/mobile home “used”?
A used manufactured/mobile home is one “which has been sold, bargained, exchanged or given away from a purchaser who first acquired the unit which was titled in the name of such purchaser” “in good faith from a licensed dealer or broker for purposes other than resale.” See A.R.S. §41-2142(27) and A.R.S. §41-2142(39).

(3) When is a manufactured/mobile home “installed” on the property?
Pursuant to A.R.S §41-2142(18) a manufactured/mobile home is installed on the property when it is:

connected to on-site utility terminals.

placed on a foundation system.

secured by ground anchoring.

“Installation” does not require the filing of an affidavit of affixture for purposes of the exemption.

(4) When is a manufactured/mobile home “listed” in a contract for transfer of an interest in real property executed by its owner?
This occurs when both the manufactured/mobile home and the real property interest is transferred in the same purchase contract. In order to transfer both the manufactured/mobile home and an interest in the real property in the same purchase contract, the seller must either own the real property or have the right to directly assign the lease for the property.

(5) What is the significance of recording an affidavit of affixture?
Except in limited circumstances set forth in A.R.S §33-1501 , an affidavit of affixture may be recorded by a person who owns a mobile home that is installed on real property owned by the owner. A.R.S §42-15201 et. seq. A mobile home that has been permanently affixed to real property and for which an affidavit of affixture has been recorded:

will be assessed as real property A.R.S. §42-15202, and

any liens against the mobile home must be perfected in the same manner as real property or a fixture. A.R.S. §28-2135.

So when can a real estate broker sell a manufactured/mobile home?
According to the DFBLS, a real estate licensee may list and sell a manufactured/mobile home without a DFBLS license only if:

the manufactured/mobile home is:

used

installed on the real property and

listed in the purchase contract for the transfer of an interest in the real property executed by its owner (i.e., the seller owns the real property or has the right to directly assign the lease for the property), or

an affidavit of affixture has been recorded against a used manufactured/mobile home so that it is considered real property.

For Additional Information
For information on obtaining a DFBLS license, visit The Arizona Department of Fire Building and Life Safety website at: dfbls.az.gov/omh/licensing.aspx

i The DFBLS maintains and enforces standards of quality and safety for manufactured homes, mobile homes and factory-built buildings and reduces hazards to life and property through the maintenance and enforcement of the state fire code. Its purpose also includes consumer protection. The DFBLS consists of the Board of Manufactured housing, the State Fire Safety Committee and the director of the department. The director’s office consists of the Office of Manufactured Housing, the Office of the State fire Marshal and the Office of Administration.

ii Pursuant to A.R.S §33-1501 a person who owns a mobile home located in a mobile home park on real property that is not owned by that person may file an affidavit of affixture with the county recorder of the county in which the real property is located if: (1) the mobile home has been installed on the real property with all wheels and axles removed in compliance with applicable state and local mobile home installation standards; (2) The owner of the mobile home has entered into a lease for the real property on which the mobile home is located for a primary term of at least twenty years and the lease specifically permits the recording of an affidavit of affixture; (3) Before filing the affidavit of affixture, a memorandum of lease is recorded that includes all of the requirements set forth in the statute. Once recorded the mobile home and the leasehold interest to which it is affixed shall be treated as real property.

Michelle Lind

Bio:

AAR Chief Executive Officer Michelle Lind is a State Bar of Arizona board-certified real estate specialist and the author of Arizona Real Estate: A Professional’s Guide to Law & Practice. This article is of a general nature and may not be updated or revised for accuracy as statutory or case law changes following the date of first publication. Further, this article reflects only the opinion of the author, is not intended as definitive legal advice, and you should not act upon it without seeking independent legal counsel.